Does Corporate Philanthropy Contribute to Product Market Competition? -The Complementary Role of Advertising Investment

Despite the relationship between CSR initiatives and firm performance has been a subject of extensive investigation, existing research rarely focuses on the complementary role of advertising investment in exploring the boundary mechanism for the financial implications of corporate social responsibility. This study investigates a theoretical framework that hypothesizes (1) the impact of corporate philanthropy on product market competition and (2) the role of advertising investment in explaining the variability of this impact among different firms. Empirical analysis of secondary information for Chinese firms listed on stock exchanges from 2010-2016 shows that corporate philanthropy can indeed promote product market competition, and the results also indicate that advertising investment plays a complementary role in the corporate philanthropy-product market competition relationship.